Nenets Autonomous Area

LUKOIL started its operations in the Nenets Autonomous Area in 1999. Currently LUKOIL is involved in oil and gas production, petroleum products marketing and transportation in the Nenets Autonomous Area.

The Nenets Autonomous Area is part of the Timan-Pechora oil-and-gas province that encompasses two entities of the Russian Federation, the Komi Republic and the Nenets Autonomous Area.

Today LUKOIL is the largest oil and gas producing company in the Nenets Autonomous Area.

The Nenets Autonomous Area has a unique asset of the Company: Varandei fixed offshore ice-resistant offloading terminal (FOIROT) that has been registered in the Guinness Book of Records as the world's most northerly offloading terminal.

Development of the Trebs and Titov field was started, a joint project of PJSC LUKOIL and ANK Bashneft.

ENVIRONMENT PROJECTS

One of LUKOIL's priorities is conservation of the fragile ecosystem of the Nenets Area and its subarctic territories, aimed at minimizing the environmental risks associated with the extraction of minerals. Trying to meet this objective, the Company implemented a number of important environmental projects. For example, in 2009 a gas desulfurization unit was commissioned at the Yzhnoye Khylchuyu field, granulating sulfur which is safe for the environment.

Implementing the program of effective and rational use of associated petroleum gas at the Yuzhnoye Khylchuyu and Tedinskoye fields power center were built using APG as fuel. In 2012 the Kharyaga-Inzyrei-Yuzhnoye Khylchuyu gas pipeline was commissioned. It delivers associated petroleum gas to the Yuzhnoye Khylchuyu power center and reduces the emission of hazardous substances into the air.

In 2010 a landfill for the disposal and storage of industrial and domestic waste was built at the Yuzhnoye Khylchuyu field.

In 2012 as part of the Reproduction of Fish Resources of the NAA project juvenile whitefish were released into the Kolva river.

In addition to that, the LUKOIL Group Entities are actively involved in the All-Russian and district environmental events and campaigns, such as the "Green City", "Clean Shores", "Blue Ribbon", "Park Parade", etc.

SOCIAL AND CHARITY PROJECTS

LUKOIL contributes to social and economic development of the regions covered by its activities. The agreements concluded with the Administration of the Nenets Autonomous Area serve this purpose. As part of its obligations in line with the agreements many infrastructure assets were built or renovated in the regions, including schools, kindergartens, cultural and sports facilities, etc.

In 2005—2006 as part of the Agreement implementation, more than 70 apartments were built and donated to the NAA administration.

In 2008 LUKOIL built the Seven Petal Flower kindergarten for 300 children in the town of Naryan-Mar, which became a prototype for the construction of kindergartens in the regions of LUKOIL operations implemented in 2012-2014.

LUKOIL supports indigenous minorities of the North living in the NAA. In addition to compensatory payments stipulated by the RF legislation for oil and gas production at the traditional economy territories, LUKOIL purchases mobile bulkheads, workwear and vehicles (snowmobiles and TRECOLs). To develop reindeer breeding, the Company purchases refrigeration units, finances animal disease control measures to treat reindeer, helps reindeer farms with helicopter transportation.

Every year since 2008 in the Nenets Autonomous Area, LUKOIL together with the NAA administration and

Total implements one of the most large-scale social projects — "The Red Chum" (reindeer skin tent). The unique nature of the "Red Chum" project has been recognized both in Russian and abroad. It is designed to provide healthcare to the residents of the Kaninskaya and Bolshezemelnaya tundra. As part of every stage implementation, medical aid is administered, doctors receive patients onsite, cultural and educational events are organized, reindeer-breeding teams receive medical supplies. More than three thousand people have been examined over the years. Significant efforts have been taken to reduce the number of TB cases among the nomadic population by periodic health examinations.

Major support is provided to the villages of the area. For example, in 2006 as part of the agreement between the NAA Administration and the Company

LUKOIL's funds were allocated to build a boarding school in the village of Nes, a school for 190 students in Karataika, and a school in Khorei-Vera. As part of the 2009-2010 minutes, extensive funds were allocated to purchase potable water units for the villages of the area to resolve one of the most important issues — providing potable water to the residents of the NAA as part of the federal and regional program "Clean water".

On top of that, a program to buy modern medical equipment for district healthcare institutions was implemented in the villages of Nes, Nizhnyaya Pesha, Oksino, Velikovisochnoye, Khorei-Ver and Kharuta, and the mobile medical team of the NAA Healthcare department

at the Central Disctrict Polyclinic of the Zapolyarny Region.

As part of the agreement between PJSC LUKOIL and the NAA Administration, for a number of years the Company has been participating in the construction and maintenance of the only winter road connecting the area with the "mainland".

LUKOIL supports traditional events in the NAA, such as the famous "Buran-day" competition, involving residents of the area, representatives of the legislative and executive authorities of the area, as well as of the Russian Federation.

Since 2005 in the NAA the Company runs the Social and Cultural Projects Competition (together with the LUKOIL Charity Fund

). As part of the competition, the Company supports NGOs that implement social, cultural and environmental projects, such as Yasavei and Yzvatas.

The Company also supports orphanages, educational institutions, societies for the disabled, veterans, and low-income citizens. LUKOIL's means are allocated to purchase equipment, furniture and accessories, organization of events dedicated to the Defender's Day, the Victory Day, the Children's Day and the Knowledge Day.

Following an established tradition, the Company fosters sports organizations and invests in healthy lifestyle promotion. For example, LUKOIL annually supports the sports competitions between municipalities of the Zapolyarny District and the district ball-room dancing contest, "Rhythms of the Arctic". LUKOIL helps NAA municipalities to purchase sports equipment, build sports grounds and hockey rinks.

The Company also helps the Russian Orthodox Church in the NAA. For instance, LUKOIL allocated funds to restore the Annunciation Church in the village of Nes, built a chapel in the village of Aneg, made a significant contribution to the construction of the church buildings in the town of Naryan-Mar.